Reno Gazette-Journal from Reno, Nevada • Page 11

Tuesday, July 23, 1985 11A Reno Gazette-Journal fi I got paid, but I did the work, all the things that are usually done by a lawyer. But as far as finder's fees from any pension funds, I did not take finder's fees 3 Morris Shenker Jl Jf are what has led prosecutors to hound him over the years. "I was practicing criminal law, and as a criminal lawyer you don't usually represent rabbis and priests. The fact remains, I don't make the law, I follow the law. There have been many times I probably represented people I would rather not have represented, but to not do so would be shirking my responsibility.

"I had no business with those people." IN JANUARY 1980, five New York mobsters, including the son of the late Joe Colombo, were arrested for failing to register as felons in Las Vegas. All five received comped rooms at the Dunes, and some of them also were charged with disorderly conduct. If there are those quick to criticize Shenker, there are also those ready to defend him. "I've loaned millions to Shenker," Valley Bank Chairman E. Parry Thomas told Nevada gaming officials in 1975.

"It has been a satisfactory experience." Thomas, also chairman of the board of Continental Connector which operated the Dunes, had good reason to come to Shenker's side: Shenker owned UK named after Kahn, which in turn owned 37 percent of Continental Connector's stock. Shenker bought that stock with the help of a $15 million Teamsters loan, and was proposing at the time to buy the rest and controlling interest in the Dunes with a $17smillion Teamsters deal. Kahn, meanwhile, bought Murietta Hot Springs in 1969 with his own $250,000 and a $1.1 million loan from Valley Bank Thomas. Gaming investigators said there was no proof of Kahn's alleged associations with the underworld, and they said he died shortly before his huge financial empire collapsed. "If a person had to pick a time to go," one gaming source said, "Irv Kahn couldn't have picked a better one." Does Shenker think he has gotten a raw deal from the press and law enforcement? "It's the nature of the criminal practice that your name gets publicized as mine did," he said, referring to his representation of Hoffa, Civella, Giordino and the like.

"These young fellas, they think, 'If I can just knock him over, knock Shenker over, knock F. Lee Bailey over and they tried to do it. "They get all excited; they think they're going to conquer the world and their powers are fantastic. It scares you to think about it. "They keep on throwing mud at you and they smear your name.

They come up with the idea that there's something wrong in Nevada, and maybe I can find it." AFTER YEARS in the gaming business, and after initiating his son Arthur into the casino world, Shenker has relieved himself of most day-to-day chores at the Dunes. In May 1984, John Anderson, the millionaire owner of Adco Farms in Davis, was approved to buy 41 percent of the Dunes for $25 million. Anderson also bought out the interests of Clifford and Stuart Perlman, whose deal with Shenker and the trustees holding the stock of the late Major Riddle fell apart. Most of Shenker's stock in the Dunes is controlled by a U.S. bankruptcy court in St.

Louis, which is handling his debt reorganization in the wake of a $34 million judgment against him for the Culinary workers in the Murietta fiasco. Shenker was accused by federal Judge Roger Foley of Las Vegas of "practicing fraud and deceit" in obtaining the Culinary loans. Last July, Foley also ordered Shenker to pay $71,000 in special costs to the Culinary trust fund. Anderson, meanwhile, has announced plans to get the Dunes in Atlantic City going again after a series of legal problems stopped construction several months ago. He also owns the Maxim in Las Vegas.

Shenker has stepped down to the role of vice chairman of the board at the Dunes, with his son now acting as Dunes president and Anderson taking over as chairman of the board. Anderson ran into problems with the Nevada Gaming Commission when it was learned that Eureka Federal Savings Loan in San Carlos, was providing a $25 million letter of credit for the Dunes stock purchase. The commission ordered the bank's former president, Kenneth Kidwell, to undergo a gaming suitability investigation as a major lender. Kidwell resigned from Eureka after arrests on drunken driving charges and a conviction of having illegal, armor-piercing bullets in two handguns found during an arrest. Shenker, meanwhile, has listed his assets in the St.

Louis court, and they include: a $500,000 suburban home, 1,514 acres in Placer County outside of Sacramento, worth $32.5 million, and more than $4.7 million in property in San Diego. FOOTNOTE: Last June, Shenker and his creditors worked out a tentative $24 million settlement, expected to be signed this month by a St. Louis bankruptcy judge. The deal calls for Shenker to sell 1.2 million shares of stock in the Dunes, as well as the 1 ,500 acres of land in Roseville, and 260 acres of land in San Diego County. If he fails to sell the property, the agreement calls for it to be auctioned off.

Creditors have formed what is called "VB-K Venture" to determine how the $24 million will be allocated. VB-K includes Valley Bank of Nevada and Thomas L. Karsens Associates, investment manager for the Southern Nevada Culinary Union's Pension Trust. Valley Bank has taken over Shenker's Teamsters loans, not to mention outstanding loans to the bank itself. Shenker denies mob connections From page 1A "I have no mob ties and I never did in my life!" he growled at a newspaper reporter in 1979.

His name was mentioned liberally in a Life magazine expose on the St. Louis mob, and is often bantered about by crime experts as an example of how organized crime gets its fingers into casinos. He still maintains that he is free from the mob's influence, but his style is more temperate, his manner a bit softer. In an interview this month with the Gazette-Journal, Shenker discussed the men who state and federal investigators claim are his links with the underworld. Age has shaved his once-pronounced jowls, stripping away a bit of his bulldog presence.

There remains a trace of a Russian accent and he still smiles a lot, no easy task considering the bitter realization that in the very near future, a bankruptcy judge in St. Louis will sign a settlement that will result in the liquidation of $24 million in Shenker assets to satisfy creditors. And on this day, Shenker was so eager to tell his side of the story that, a serious cold aside, he had a reporter into his lavish 18th-floor corner penthouse apartment at the Las Vegas Country Club. When his secretary and aide opened the curtains behind the pajama-clad Shenker, a panorama of the country club golf course and Las Vegas skyline appeared as a backdrop. Morris Shenker was naturalized as a U.S.

citizen in St. Louis in 1931. He attended St. Louis University briefly before switching to Washington University in St. Louis, earning a bachelor's degree in two years.

He worked his way through Washington University Law School, running up one of the highest grade averages in the school's history. Work was scarce when he graduated, so he hung out at the courthouse and started to represent small-time crooks. And he did it well, winning about four out of five cases and rapidly gaining a reputation as a tough, smart criminal attorney. The word at the time was that his firm was handling about half the cases on the St. Louis criminal docket.

HE GRADUALLY picked up wealthier clients, many with unsavory reputations. He represented some of the gangsters called to testify before the 1951 Kefauver Senate Committee investigating the mob. Soon, Jimmy Hoffa would come to him for legal advice and Shenker took on a growing role in Hoffa's Teamsters Union. From the late 1930s to the early 1950s, his political base expanded in St. Louis, due in part to his control of the Plumbers and Steamfitters Local 562 political campaign fund.

That union local would reenter the picture several years later, financing parts of Shenker's real estate developments. Morris Shenker was well on his way, but many of those he represented and the figures he associated with in those early days would, perhaps to his dismay, follow in tow. His 1975 gaming license investigation was the most extensive in the history of Nevada gaming control. He first planned to buy the Dunes, but later scaled down his involvement to holding an interest in the resort and running it. Ganung investigators had a few questions for Shenker: He defended Hoffa.

He defended the Civellas in Kansas City. He had been identified in FBI affidavits as a front for organized crime. A Chicago mobster threatened his life if he didn't pay up on an old Teamsters pension fund debt. Aware that authorities were probing his background and past associations, Shenker came to Carson City in 1979 to play ball: He spent $160,000 to deflect the allegations, brought in 56 witnesses, submitted 113 affidavits and 100 exhibits. "At first I was very incensed about it," he said, "but maybe there was some justification in bringing it all out.

Every question they asked, we answered. And yes, we were forced to spend a lot of money." FORMER GAMING Commission Chairman Phil Hannifin later recalled the hearings: "We thought we had him cold, but everything we set up, he wiped out. We fought our fight and he just flat whipped us. What a mind. He's an incredible man, too damn cagey.

I don't think anyone will ever prove anything against him." "There was a feeling that, 'Hey, this guy's but there was no evidence of it," said Gaming Commission Chairman Paul Bible. "Shenker almost had the burden of proof." If Nevada gaming regulators were unable to keep Shenker out of the business, it wasn't for the lack of trying. The following comes from a confidential report prepared in 1976 by the New Mexico Governor's Organized Crime Prevention Commission when Shenker was setting up a development deal there: "Shenker's representation of Hoffa and his association with him led to a profitable position of influence with the Teamsters Central States Pension Fund. This, plus his association with deceased San Diego organized crime figure Irving J. Kahn, allowed Shenker to amass sizable real estate and business holdings, especially in Las Vegas and the San Diego area." Shenker acknowledges having close ties to Hoffa when the former Teamsters boss was alive, but he denies using that relationship to help nail down union pension fund loans for himself and his clients.

"The truth of the matter is," said Shenker, "that the Teamsters pension fund was in the business of loaning money." He said his first contact with the fund was on behalf of Kahn, who was applying for a loan to build a bowling alley in the San Diego area. "I represented that company before the Teamsters in its application for the loan; I was not representing him (Kahn). And the Teamsters got paid every dollar." DOES HE think his close ties with Hoffa helped him obtain loans? "When I look back and I see the loans, considering the clients I represented, I'm not so sure. Hoffa and I I liked Hoffa and did a job for him as a lawyer. I did it the best I could.

"But you have to remember, Hoffa was only one man on a 13-man (pension fund trustee) board. A lot of times he was not at the board meetings. I don't know if I was the beneficiary of any favorable treatment." Mafia informant Jimmy Fratianno told an attorney in a closed-door deposition in 1981 that his former attorney and Shenker's former partner, Kahn, borrowed "some big amount" for Penas-quitos, a housing development in Southern California. He was asked about the terms of the Teamsters loan and whether he paid kickbacks for it. "He had to.

I was told he paid under the table." The questioning, which came in a deposition concerning the Teamster-backed Rancho La Costa resort near La Jolla, turned to Shenker and his Mur-ieta Hot Springs, also in Southern California: Question: "Did you and your wife ever stay at Murieta Hot Springs between the summers of 1973 and '74?" "Answer: Yes, sir." "Who owned Murieta Hot Springs?" "Morris Shenker at the time I was there, sir." "Did you know Shenker well enough at the time to talk to him?" "Well, I met him there, sir." "Did you talk to him about who MHS had been financed by?" "Well, Murieta I think was financed by the Plumbers Union." "For how much?" "$30 million, I think. I am not sure." "Did you and Mr. Shenker discuss people whom you had in common?" "Yes, we did." "Who?" "Well, we discussed (the late) Tony Giordino. We discussed Hoffa. We discussed a lot of people we had in common." "Tony Giordino whom you refer to, does he have a position in La Cosa Nostra?" "Yes, sir." "What is it?" "He is the boss of the St.

Louis family, sir." "To your knowledge, did Giordino control anybody in the Teamsters?" "He controlled Shenker." "Anybody else?" "(Former Teamsters President) Roy Williams." "Who controlled Hoffa?" "Well, the Detroit family controlled Hoffa." Later, "Did Nick Civella of Kansas City have anything to do with Morris Shenker?" "Well, they do business together. "When Jimmy Hoffa was around, who was the key one that had to be contacted in order to get a loan from the Teamsters?" "Well, Shenker gave out a lot of loans. There was other ways of getting Teamsters loans besides Shenker, but Shenker was responsible, I think, for more loans than anybody." "What relationship, if any, did Shenker have to the Dorfmans?" "They were very close, sir." FRATIANNO TESTIFIED in the Los Angeles racketeering trial of Dominic Brooklier and other Southern California underworld figures that it was also at Murietta where the late Frank "The Bomp" Bompensiero was elevated to consigliere in the Los Angeles crime family. Fratianno has testified Bompen-siero's superiors gave him the promotion to relax him while they were planning his execution. Bompensiero was killed shortly thereafter while leaving a phone booth in San Diego.

According to Shenker, who admits knowing Fratianno, the washed-up Mafia hit man got a few of his facts wrong in the above sworn statement. particularly pertaining to Shenker's associations with Giordino. "Fratianno, he bought a lot at Murietta, but I didn't sell it to him, a salesman did. I met him one day, and he talked as though he knew me." Shenker said he saw Fratianno "once or twice, and naturally I treated him with courtesy. When I later found out about his background, we gave him his money back and he left.

I saw him altogether four or five times." Shenker also was quick to respond to Fratianno's claim the former Dunes boss was under the thumb of the St. Louis crime family. "I was never a front man for anybody," he said. "Nobody can ever say with any degree of knowledge that I was a front for anyone. Never." He said Giordano "was a man in St.

Louis who was accused of having hoodlum connections. The only time I represented him was when he was accused of a crime. He never attempted to exercise any control over me; I never let anybody exercise any control over me." The New Mexico Crime Commission report continues with Shenker's adroit business dealings: "IN ADDITION to Shenker's reputation as a key source of pension fund financing, he has been a shrewd manipulator of complex corporate deals, many of them tainted with alleged criminal manipulation and definitely marked with organized crime connections. "Shenker operates in what has been termed the 'Twilight Zone' of organized crime. It is far more difficult to prove criminal acts in his types of complex operations than in such crimes as book-making or extortion.

He is skillful enough to present a facade of legitimate operation, but he invariably follows a route which suggests deception if not criminal implications. An example of this was a series of corporate maneuvers by which control of the Dunes was gained by a small clique, whose members included two former St. Louis bookmakers. "Shenker could not infiltrate many legitimate businesses as successfully without the financial support of the Central States Pension Fund," from which he borrowed nearly $200 million. "At the same time, Shenker reflects an image of impressive concern for his fellow man and his community.

His civic involvement includes the founding of Dimas House, a rehabilitation center for ex-convicts; he is one of the country's leading fund-raisers for Israel; he was honored to be official host for the 1970 American Bar Association, Criminal Law Division; and he was appointed chairman of the St. Louis Crime Commission. "He is a very personable individual who readily impresses people with his 'take-charge' attitude and his ability to dominate business discussions. Certainly, he is a man of action. "To his supporters, many of considerable public stature, he is a hero.

To his critics, he is organized crime personified to a degree of major stature." OTHERS HAVE raised similar questions. "Adept at confusing (IRS) agents with complicated web of transactions," wrote Overdrive, a Teamsters publication put out by an activist wing of the union. "Has represented several mobsters. As Hoffa's lawyer, Shenker wielded great power over Teamster loans, all the while collecting millions in finder's fees as well as loans." Responds Shenker: "Yes, I got paid, but I did the work, drafted documents, all the things that are usually done by a lawyer. But as far as finder's fees from any pension funds, I did not take finder's fees." In November 1975, former Gaming Commission Chairman Pete Echeverria demanded to know why reputed Chicago Mafia enforcer Tony Spilotro of Las Vegas, whom Echeverria called "a very dangerous individual" was using the Dunes' poker area as a personal "office," often holding court in the casino for 14 hours a day.

Echeverria also asked the late Dunes chief Major Riddle to explain his habit of playing cards with Spilotro, although Riddle insisted he knew nothing of Spilotro's background. In December 1974, Echeverria said the Dunes appeared to be rolling out the red carpet for mob figures, such as the late Kansas City mob boss Nick Civella, whom Shenker had represented. In January 1975, the federal Strike Force in St. Louis slapped the Gaming Control Board with a subpoena, demanding information on Shenker. The government was looking into a check-witing scam involving three Shenker real estate ventures, Penasquitos, Murietta Hot Springs and Horizons West.

There were allegations that money was flowing among the three properties to conceal illegal loans. The Teamsters had $140 million in Penasquitos. SHENKER DEFLECTED the allegations, saying he didn't think the charges were valid, but if they were, "It would have been Mr. Kahn who was in charge." The Senate's Permanent Subcommittee on Investigations, which recently concluded a lengthy probe of the Culinary Union, raised new questions about Shenker benefiting from that union, and gets into Shenker's Southern California land deals. "The first loan executed by the International Union after (former President Ed) Hanley assumed his leadership role was for a resort and development firm owned by Morris A.

Shenker, named Murieta Hot Springs. On Jan. 10, 1974, the union gave Shenker $2 million, secured by four parcels of undeveloped land totaling 192 acres in Riverside County, Calif." The report said Shenker "allegedly acted as a middleman between organized crime and legitimate business interests," and "is considered to be the largest single borrower from the Teamsters Central States Pension Fund, having obtained some $156 million." The Teamsters, meanwhile, had loaned Shenker the $150 million for the Penasquitas Hotel-Casino in Las Vegas and $6 million for the Dunes. In 1974, the Southern Nevada Culinary Workers and Bartenders Fund loaned the Shenker-controlled Sierra Charter Corp. $17.9 million.

Shenker also borrowed $11.5 million from the St. Louis Plumbers and Steamfitters Local 562 the same union he once ran a political fund for. Former Senate investigator Jack Key testified at an oversight hearing on the Labor Department's Teamsters investigation that the Teamsters were manipulated by the Chicago-Kansas City Mafia and the two families' chief labor "consultant," Allen Dorfman. Basing his testimony on federal affidavits, Key reminded the committee that Nick Civella, who was once represented by Shenker, enjoyed comp privileges at Shenker's Dunes. IN 1974, while on pretrial travel restrictions in Missouri, Civella was seen checking into the Dunes under an alias.

Next to his name in the hotel's guest register was the notation: "This man can get anything he wants." The Dunes was later fined $10,000 for furnishing comps to a member of Nevada's "Black Book" of persons barred from casinos. "Loans of questionable merit, including a loan to the Dunes, have been approved through Dorfman and Civella's influence," Key said. "In this same affidavit of Sept. 24, 1978, it states that the Kansas City organized crime group headed by Nicholas Civella has a concealed interest, fronted by Morris Shenker, in the Dunes Hotel-Casino." Asked about that claim in 1979, Shenker snapped: "Shenker has never fronted for anybody." He elaborated on the Civella affair in his more recent interview: "I'm from Missouri; I represented Nick Civella and quite a few people from Kansas City over a number of years, including, I think, his nephew. "I was not their regular lawyer.

I have never been involved in business with them; the only deals I ever had was as attorney and client." Shenker said the Nick Civella comp incident took place when he was an attorney for the Dunes, before he took over as chairman. "In my opinion, he would not have checked in if I had been in control. I would have said, 'Nick, I'll get you a room at some other Besides, he was in the Black Book." Shenker then said his dealings with Civella and other reputed crime figures ON WEDNESDAY: 'Jimmy the Weasel' Fratianno is a key government informer. Also: a look at the inner sanctum of La Cosa Nostra..